Legislation for the collection of online sales taxes took a major step forward in a Senate vote Monday evening.

The legislation -- known as the Marketplace Fairness Act -- scored a big victory in a procedural vote of 74-20 Monday night. It even won backing from U.S. President Barack Obama.

The Marketplace Fairness Act allows states to force out-of-state retailers to collect online sales taxes. Currently, states can only require merchants within their borders to collect sales taxes.

The legislation offers an exemption for merchants that generate less than $1 million in annual out-of-state revenue.

"It will level the playing field for local small business retailers who are undercut every day by out-of-state on-line companies," said Jay Carney, White House spokesman.

Senate Majority Leader Harry Reid filed a motion in support of the new bill last Thursday.

Many states are in favor of the Marketplace Fairness Act because the money from sales tax collection could help with financial deficits. For instance, the California Board of Equalization said it made $96.4 million in sales tax on internet commerce from September-December 2012, which is the first full quarter that the state started collecting.

Brick-and-mortar stores are also happy with the legislation, since stores like Wal-Mart and Best Buy have complained about the unfair advantage online retailers like Amazon have when it comes to the lack of sales tax collection in certain states.

However, not everyone is in favor of the Marketplace Fairness Act. Sen. Kelly Ayotte (R-NH) strongly opposes the legislation, and plans to fight it until the end.

"This is big retailers and big business lining up to put burdens on the Internet for small online business," said Ayotte. "It is so wrong and it is a precursor to other things they will try to grab using the Internet, including taxing the Internet."

Amazon CEO Jeff Bezos has said that he would comply with sales tax collection if there were some sort of federal legislation regarding the topic. It has been fighting U.S. states that force it to collect sales tax for years (except in Kansas, Kentucky, New York, North Dakota and Washington). Only recently has it started collecting in additional states (like Texas and New Jersey, for example). But in return, Amazon gets to create more distribution centers within these state's borders.

This may be state taxes but it's at a federal level in the Senate. This is not the way to go to recover from a recession.

In a recession/depression, the government is supposed to bite the bullet and increase spending, decrease taxes, create jobs, work on infrastructure for economic growth. Fed Reserve is supposed to decrease interest rates, increase money supply, and maybe(probably not) change reserve ratios.These are basic macro economics principles.

Instead we got increase in tax, sequestration, hiring freeze, even less money invested in infrastructure.

It has been done in the past and we have recovered from much worse recessions/depression. WTF are these politicians thinking? that they know better than what history has taught us over and over again?

Seriously, the government should be doing huge public projects like laying fiber optics across the nations. Linking every cities with high speed train tracks. Improving our water systems, electric grids, sewage/waste disposal systems, recyling systems, etc...These are all things we need in the near future that will boost our economy. No, we'd rather have people sitting around collecting unemployment.

SMH, and honestly it's all because of the party systems. It's a drama fest instead of getting results for the country.

quote: In a recession/depression, the government is supposed to bite the bullet and increase spending, decrease taxes, create jobs, work on infrastructure for economic growth.

In my state, we have to have a balanced budget. We can't spend money we don't have. This leads to a stupid feast/famine cycle because we are dependent on consumer activity to fund our state government operations and we don't have personal income taxes to provide some semblance of revenue stability. We can't go into deficit spending to pay for things. Collecting all applicable sales taxes seems like a no-brainer to me.This legislation is at the federal level, because states don’t have the authority to unilaterally collect taxes across state lines. Federal law needs to change in order to permit this, which is why this is in the Senate.

quote: It has been done in the past and we have recovered from much worse recessions/depression.

Um… when? The great depression is the only previous economic period that was worse than what we had to endure starting in 2008, and that recovery was much more painful and drawn out than what we have right now.

Huge projects should have been done at the beginning, but because states over inflated their lists of “shovel ready” projects, and conservatives dragged their feet and demanded a more laissez-faire economics approach, we got what we did.

So because a city government does something stupid, that was apparently 20 years in the making, we shouldn’t expect government (city/state/federal) to do anything. I guess then you think it was a good thing then that we didn’t waste any money on OSHA inspectors. I’m sure the people in West, Texas will totally agree with you on that.

I trust then that you will do your part to avoid using any of the paved roads you despise so much.

You use the usual "you want roads, don't you?!?" strawman argument that every liberal welfare state pumper uses.

Look at the expenditures of every level of government, a minuscule portion actually goes toward infrastructure development. The bulk of the money goes toward crap like the article I linked mentions, yet you casually dismiss it as a one off event. No, these aren't one off projects, they are long term systemic problems with an out of control welfare state that is sucking the taxpayer dry.

Cease projects like that and I'll be happy to pay internet taxes. But as long as fraud, waste and abuse like that continues at the hands of progressive do-gooders, then I won't be supporting any additional taxes. Ditto that for government employees making 2, 3, 4... 800k per year as well.